- Avoid any loan modification company that demands advance fees. With limited exceptions, California has banned any type of advance fee to work with your lender to modify, refinance or reinstate your mortgage. The obvious risk is that they may pocket your money and do nothing to save your home from foreclosure.
- Over the top guarantees. No matter how much experience someone claims to have, nobody can truly guarantee that they can stop foreclosure or modify a loan. The only thing they can really promise is that they will do their best to help you.
- The company advises you to stop paying your mortgage. People who are behind on their mortgages are often having other bill problems and they can be tempted to spend the mortgage payment on other perceived needs. When the lender wants a good faith payment during negotiations, the money is gone. Do not make your payments to the loan modification provider under an circumstances.
- The company asks you to sign over your house or sign paperwork that you haven't read. A legitimate housing counselor would always give you time to review the document and understand it.
- A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
- U.S. Government Program to Refinance or Modify Loans:
To find out if you qualify, and how much your loan might be reduced, Click Here .
- HUD-Approved Foreclosure Counseling Agencies:
Click Here to find a HUD-approved counselor or call 877-HUD-1515.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar, the San Diego County Bar Association and the National Association of Consumer Bankruptcy Attorneys. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.